1.1.................... moves to amend H.F. No. 3663 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2008, section 256B.69, subdivision 5i, is amended to
1.5    Subd. 5i. Administrative expenses. (a) Managed care plan and county-based
1.6purchasing plan administrative costs for a prepaid health plan provided under this section
1.7or section 256B.692 must not exceed by more than five percent that prepaid health plan's
1.8or county-based purchasing plan's actual calculated administrative spending for the
1.9previous calendar year as a percentage of total revenue. The penalty for exceeding this
1.10limit must be the amount of administrative spending in excess of 105 percent of the actual
1.11calculated amount. The commissioner may waive this penalty if the excess administrative
1.12spending is the result of unexpected shifts in enrollment or member needs or new program
1.14    (b) Expenses listed under section 62D.12, subdivision 9a, clause (4), are not
1.15allowable administrative expenses for rate-setting purposes under this section, unless
1.16approved by the commissioner.
1.17(c) A prepaid health plan must meet a loss ratio of not less than 93.5 percent,
1.18calculated as specified in this paragraph. The loss ratio consists of a numerator consisting
1.19only of direct expenses of providing patient care to persons covered under the program,
1.20excluding administrative expenses. The denominator consists of the total amount paid by
1.21the commissioner to the prepaid health plan, after subtraction of taxes and other mandatory
1.22government assessments directly attributable to the plan's participation as a provider in
1.23the program being reported on. Payments by the prepaid health plan to unaffiliated third
1.24parties or to providers or other entities that own, are owned by, or are under common
1.25control with the plan must be divided into patient care expenses and administrative
1.26expenses and included in the appropriate category for determination of the loss ratio.
2.1(d) A bid submitted by a prepaid health plan may include a provision obligating the
2.2bidder to provide free services to uninsured, low-income persons as specified in the bid
2.3if necessary to meet the required loss ratio, to the extent that the loss ratio for that year
2.4would otherwise not reach 93.5 percent.
2.5(e) Nothing in this subdivision requires the minimum loss ratio to be applied to any
2.6plan's business other than that business awarded by the commissioner, unless the plan fails
2.7to keep a separate and distinct accounting of funds received from the commissioner.
2.8EFFECTIVE DATE.This section is effective January 1, 2011.

2.9    Sec. 2. Minnesota Statutes 2008, section 256B.69, subdivision 9, is amended to read:
2.10    Subd. 9. Reporting. (a) Each demonstration provider shall submit information as
2.11required by the commissioner, including data required for assessing client satisfaction,
2.12quality of care, cost, and utilization of services for purposes of project evaluation. The
2.13commissioner shall also develop methods of data reporting and collection in order to
2.14provide aggregate enrollee information on encounters and outcomes to determine access
2.15and quality assurance. Required information shall be specified before the commissioner
2.16contracts with a demonstration provider.
2.17(b) Aggregate nonpersonally identifiable health plan encounter data, aggregate
2.18spending data for major categories of service as reported to the commissioners of
2.19health and commerce under section 62D.08, subdivision 3, clause (a), and criteria for
2.20service authorization and service use are public data that the commissioner shall make
2.21available and use in public reports. The commissioner shall require each health plan and
2.22county-based purchasing plan to provide:
2.23(1) encounter data for each service provided, using standard codes and unit of
2.24service definitions set by the commissioner, in a form that the commissioner can report by
2.25age, eligibility groups, and health plan; and
2.26(2) criteria, written policies, and procedures required to be disclosed under section
2.2762M.10 , subdivision 7, and Code of Federal Regulations, title 42, part 438.210(b)(1), used
2.28for each type of service for which authorization is required.
2.29(c) All financial reporting, including reporting of administrative expenses, under this
2.30section must be reported in compliance with generally accepted accounting principals.
2.31If the commissioner believes this paragraph would violate federal regulations, the
2.32commissioner shall promptly seek a federal waiver to permit the state to comply with
2.33this paragraph. The commissioner may accept donations to cover the cost of the waiver
3.1EFFECTIVE DATE.This section is effective January 1, 2011.

3.2    Sec. 3. Minnesota Statutes 2008, section 256B.69, is amended by adding a subdivision
3.3to read:
3.4    Subd. 9c. Rights to audit related to the loss ratio. (a) Within 90 days after the
3.5end of each calendar year, each managed care plan used by the commissioner to provide
3.6services under this section shall furnish to each provider that furnished services during
3.7the calendar year under a contract with the plan a Web-based statement in reasonable
3.8detail setting forth the computation of the total costs and expenses used in the calculation
3.9of the minimum loss ratio as well as the amount of administrative expenses incurred in
3.10the prior calendar year.
3.11(b) Any provider or group of providers may, at its expense and after 14 days written
3.12notice, audit and inspect all records of the managed care plan relating to the costs and
3.13expenses which are used in the calculation of the minimum loss ratio, provided that at
3.14the end of 24 months following the end of any calendar year the plan's records shall be
3.15deemed to be conclusive, and the providers have no further rights to audit and inspect
3.16them with regard to that calendar year.
3.17(c) In the event that an audit or inspection determines that a plan failed to satisfy the
3.1893.5 percent loss ratio requirement, the following shall apply:
3.19(1) the plan shall make a payment to the commissioner equal to the amount by which
3.20the plan failed to satisfy the minimum loss ratio, to be deposited in the fund from which the
3.21payments to the plan were made, as determined by the commissioner. If the commissioner
3.22cannot specify the fund, the payment shall be deposited in the health care access fund; and
3.23(2) if the plan falls two percentage points or more short of satisfying the 93.5
3.24percent minimum loss ratio, the plan shall reimburse the provider or group of providers
3.25for reasonable costs incurred for the audit or inspection.
3.26(d) No plan used by the commissioner may require any provider to waive this right
3.27to audit as a condition of participation with the plan. No plan may retaliate against any
3.28provider for exercising any rights related to the audit described in this subdivision.
3.29(e) If a plan and a provider or group of providers disagree regarding the result of
3.30an audit or inspection of records conducted under this subdivision, the commissioner
3.31shall refer the dispute to the attorney general for resolution. Each party shall pay its own
3.32expenses in connection with the process of resolving the dispute.
3.33(f) An enrollee or group of enrollees has the right to conduct an audit and inspection
3.34of a plan's records on the same basis granted under this subdivision to health care providers.
4.1(g) The commissioner shall describe the requirements of this subdivision in any
4.2request for proposal for services to which this subdivision applies.
4.3EFFECTIVE DATE.This section is effective January 1, 2011."